jim klass tracy delphia, ph.d. › wp-content › uploads › 201… · flexible & scalable...

1Copyright © 2015 Vistex, Inc. Proprietary and confidential. All rights reserved.

April2015

Foodserviceandthe“MissingLink”forTradeSpendOptimization

JimKlassTracyDelphia,Ph.D.

Flexible&Scalable

WhatDoYouBuy&Sell?

WhoDoYouBuy&SellTo?

HowDoYouPriceWhatYouBuy

&Sell?

HowDoYouDriveRevenue&

ControlSpend?

HowDoYouDriveBehavior?

ProductsServicesRights

CustomersVendors

ChannelPartners

PricingDeals

ContractsPromotionsRoyaltiesMDFs

RebatesIncentivesBrokerage

Commissions

Go-to-Market Suite™


Agenda

Background

TradeEco-systemisChanging

TechnologySystemsandTrade

FutureofFoodserviceTrade

TradeInvestmentandTradeTeams


Background


TradeEco-system ContractedOperators surpassthestreetvolumeformostmanufacturers

GPOproliferationcreatesopportunitiesandchallenges formanufacturers

TradeInvestmentandTrade Teams

34%havededicatedTrade Teams

Tradespend=17%

38%havededicatedTradeTeams

Tradespend=18%

TechnologySystemsandTrade

Lackofsystemsmeanslackofinsight§ 60% unabletoevaluatepast

distributormarketingprogramsforeffectiveness

§ 85%don’tknowwhichTradepromotionsworked

Dataissuescontinuetoinhibitprogress§ Unabletomeasure

performanceduetolackoftechnologysolutiontocollect,aggregate,andanalyze data

Previous Foodservice Trade Survey Highlights

2011Survey2009Survey


2014 Foodservice Trade Survey

§ResearchwasconductedinNovemberandDecember2014with36NorthAmericanFoodservicemanufacturers.


Trends affecting Foodservice Industry

§IndustryconsolidationandcommoditiesareexpectedtohavethemostimpactontheFoodserviceindustrythrough2016.


TradeEco-systemisChanging


Broker Consolidation Hasn’t Achieved the Results Promised

§ In2009themajorityofManufacturerswereexclusivelyBroker

§ “Mega-brokers”justlookingforanumbertohithavelostlocalknowledge,disintermediatingManufacturersfromtheverygrouptheywanttobecloserto

ImplicationèManufacturersneedtoutilizetheirclaimsdatatodirectsalestothenextbestoperatoropportunities

“Motivatingbrokerstoexecutekeepsmeupatnight.”


Dedicated Trade Team Now Table Stakes

§MostmanufacturersnowhavededicatedTradeTeams– asignificantchangefromjustafewyearsago.

34% 38% 84%2009 2011 2014

ImplicationèManufacturersareacknowledgingtheimportanceofTrade;respondentsdiscussthe“needfordisciplinetoinsurebalance.”


Trade Team Organizational Home

§HomingofTradeTeamsinFinancesuggestsa“tacticalmindset.”

HomingofTradeTeamsoutsideFinancereflectsashifttoaStrategicTrademindset asTradeisusedinatargetedapproachtodrivenewbusinessstructureforTrade.

41%

Implicationè Tradeplanningneedstobemorecollaborative,evenwhileFinancemaintainsfiscaloversight

Note:“Other”respondentsindicateasharedreportingstructurethatincludesSalesand/orMarketingwithFinance


Program Analysis

§AnalysisofprogramsistheBlindSpotinmanufacturerstradepractices:§Lessthan7%alwaysanalyzetradefor:

§ ROI(haveacommonmethodology)§ ImpactofmultipleprogramsonGrossto

Net§ Sharinginsightswitheitherdistributoror

operatorpartnerstodriveimprovedperformance


Trade Process Evolving as a “Win-Win”

6%Distributor

44%Distributor+Operator

3%Operator

Aboutathird(31%)ofsurveyrespondentsstilluseasiloedapproachtoplanningTradespend.

ButsomenowjointlyplanTradewithdistributors,operatorsorboth.

Implicationè Planningformutualbenefit israpidlybecomingtablestakes.


Trade Investment Spend: 2013 - 2015

§Athirdofmanufacturersanticipatespendingless onTradein2015.Efficienciesandstrategicinvestmentarethemostprobableexplanation.§ Only16%ofrespondents

increasedTradeinvestmentinboth2014and 2015

§ Manufacturersarealsoutilizing“recapture”toreduceEarnedIncomeforContractedAccounts

Implicationè TheamountspentforTradeinvestmentisstabilizing


TradeOrganizationandInvestment


Trade Spend Allocation

§ManufacturersvarygreatlyinhowTradeisallocatedtodistributorsvs.operators.Since2011,TradeisshiftingmoretowardtheoperatortoinfluencethedistributorpurchasesasCategoryManagementtakeshold§ Manufacturerswithstrong

BrandsorcontractedbusinesstendtohavehigherOperatorspend


Overall Trade Investment

§AverageTradeinvestment§Upslightlyfrom2011paceofincreasehasslackenedandmayreversebasedupon2015projections

19%

RecaptureReduceearnedincomeforcontractedaccounts;thisisupsignificantlyfrom35%in2011.

Implicationè Traderatesneedtobescrutinizedforopportunitiestocapturemarginandredirecttotheoperator

91%

Whatyou spendonTradeshouldbe

determinedbasedon:

1. Competition2. Category3. MarketShare4. Margin

Contribution


Distributor Trade is at an Inflection Point

§ManufacturersnowhaveadefinedstrategyforbothIndependent&CorporateDistributors

§(CorporateOpCoarereceivinglesslocalprogramsasfundsmovetoHQ)

§BuyinggroupsarereceivingmoreattentionandarebeingaskedtobestrategicpartnerswithmanufacturersduetotheSysco/USFandothercorporatedistributorconsolidation

§CategoryManagementisforcingManufacturerstochangehowtheyallocatetheirtradefunds:

§Lessornotradetothedistributorforrestrictedcategories

§MoretoOperatorsto“pull”casesthrough

88% 53% 60%


Operator Trade

ImplicationèManufacturersneedbettervisibilitytohowoperatortradeisdrivingbothcomplianceandvelocity

ManufacturerswhoincreasedtheamountofOperatorSpendin2014

Manufacturerswhoincreasedoraddeddeviatedpricingin2014

56%

29%


Overpayment on Operator Programs and Bids

§OverpaymentonOperatorprogramsisaseriousconcernwith94% ofmanufacturersbelievingthey(may)haveoverpaid!

Implicationè TakecontrolofyourTradeprogramandstopoverpaying!


Group Purchasing Organizations

§WithsomeincreasesinGPOspend,manufacturersaremorelikelytodevelopchannelguidelinesforGPOs.

Implicationè GPOsarecrucialbutmembershipandchannelmustbemanaged


DataandSystemsforManagingTrade


Usable, Formatted Data is a Concern

§Themajorityofdata– 90%fromOperators,84%fromDistributors– requiresatleastsomecleansing.

Implicationè ConvertingClaimsdataabouttheoperator(unitlevel)intoactionableinsightsiscrucialformanufacturerstoengagewiththeoperatoranddrivecomplianceandvelocity


(Not Much) Satisfaction with Current Systems

§ 40% ofmanufacturersarenot satisfiedwiththeircurrentsystemstomanageTrade.

§ Mostbelievesystemshandletactical contracts,claimsandpaymentswell…

§ Butfailtoprovidestrategicinsightlikeanalyticsanddashboardreporting

ImplicationèManufacturersmustrequiremorefromtheirsolutions;basicblockingandtacklingaren'tenough.Actionableinsightsonmarginandvelocitywilldifferentiatebest-in-classfoodservicemanufacturersfromthecrowd.

35%HomeGrown


Administrative Cost for Trade

§TechnomicestimatestheadministrativecostforTradeas3.2%ofsalesbutathird(35%)ofmanufacturersreportlowercosts.

ImplicationèManufacturersmuststreamlineprocessandmanageexceptionsinanautomatedsystem


Manufacturers Lack Critical Insights & Reporting

32% 39% 61% 40%

§Seldomornever…

§Evaluatepastdistributormarketingprogramsforeffectiveness.

§Seldomornever…

§Evaluatetheimpactofmultiplecontractsonadistributor,operator,unit,and/orproductlevel.

§Seldomornever…

§Shareanalyticaldataandinsightswithdistributorsandoperatorsinsupportoftheannualagreementprocess.

§Seldomornever…

§Analyzedistributordeviatedproof-of-performanceinformationattheunitlocationlevel.

%Manufacturersanswering“Always”

32% 10% 6% 7%


Needed Enhancements to Current Systems

Mostitemsonmanufacturers’“wishlist”toimprovetheirsystemsarefeaturesconsideredtablestakesinotherindustries:§ Integrationwithothersystems§ Reporting,dashboards§ Democratizationofinformation§ Unitlevelvisibility§ Post-programanalysis§ Self-serviceanalytics§ Easeofuse


FutureofFoodserviceTrade


Strategic Approach to Foodservice

Concerns RequirementsManufacturersarefocusingontradetodrivemarginandincrementalsales§ Butitmustbemoreefficient

Compatibilitywithcurrentfinancials;numberneedstobeTHE numberforallreportingandanalytics

Resourcesarealreadystretchedthin;howtodomorewithless?Utilizeothers’capabilities

Easeofusebyfieldè CRMintegrationUnitlevelperformance

NeedtoprovidemoreprescriptiveguidanceonbothsellingaswellaspromotionalofferingsAnalyticsthatdriveaction

AbilitytomeasureeffectivenessClean,accurateandtimelydatafeeds


The Missing Link in Foodservice Trade?

Dataandsystemstogenerateinsightsthatwilltakeyoufrom

tacticalTradeSpendtostrategicTradeinvestment.


www.vistex.com

Vistex®, Go-to-Market Suite®, and other Vistex, Inc.graphics, logos, and service names are trademarks,registered trademarks or trade dress of Vistex, Inc. inthe United States and/or other countries. No part ofthis publication may be reproduced or transmitted inany form or for any purpose without the expressedwritten permission of Vistex, Inc. The informationcontained herein may be changed without priornotice.

© Copyright 2015 Vistex, Inc. All rights reserved.

Vistex provides enterprise solutions that manage pricing, incentive, rebate, royalty andchannel programs to enhance business performance while reducing labor andinfrastructure costs. The industry-optimized Go-to-Market Suite® provides end-to-endsolutions for design, management and administration of the complete spectrum ofprograms. With an unparalleled offering of software and services, enterprises areempowered with unprecedented visibility into program performance, gaining deeperinsights to better enable fact-based decisions that drive revenue, control cost, minimizeleakage, and streamline processes.

MakeMore.KeepMore.GrowSmarter.

Copyright

JimKlass,IndustryPrincipal|[email protected]

jim klass tracy delphia, ph.d. › wp-content › uploads › 201… · flexible & scalable...

Documents